Key Insights

• Guangdong Misun Technology's significant private companies ownership suggests that the key decisions are influenced by shareholders from the larger public
• 55% of the business is held by the top 2 shareholders
• Institutional ownership in Guangdong Misun Technology is 12%

To get a sense of who is truly in control of Guangdong Misun Technology Co., Ltd. (SZSE:301577), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 56% to be precise, is private companies. Put another way, the group faces the maximum upside potential (or downside risk).

And last week, private companies endured the biggest losses as the stock fell by 13%.

Let's take a closer look to see what the different types of shareholders can tell us about Guangdong Misun Technology.

What Does The Institutional Ownership Tell Us About Guangdong Misun Technology?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

We can see that Guangdong Misun Technology does have institutional investors; and they hold a good portion of the company's stock. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Guangdong Misun Technology, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Guangdong Misun Technology. Shenzhen Quanzhen Investment Co., Ltd. is currently the largest shareholder, with 46% of shares outstanding. Dongguan Tongxin Industrial Investment Partnership Enterprise (Limited Partnership) is the second largest shareholder owning 8.6% of common stock, and China Resources Capital Management Limited holds about 4.7% of the company stock. Additionally, the company's CEO Dingzhen Zhang directly holds 2.8% of the total shares outstanding.

To make our study more interesting, we found that the top 2 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Guangdong Misun Technology

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

We can see that insiders own shares in Guangdong Misun Technology Co., Ltd.. As individuals, the insiders collectively own CN¥71m worth of the CN¥2.5b company. Some would say this shows alignment of interests between shareholders and the board. But it might be worth checking if those insiders have been selling.

General Public Ownership

The general public-- including retail investors -- own 29% stake in the company, and hence can't easily be ignored. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Private Company Ownership

It seems that Private Companies own 56%, of the Guangdong Misun Technology stock. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Guangdong Misun Technology better, we need to consider many other factors. Take risks for example - Guangdong Misun Technology has 3 warning signs (and 1 which is concerning) we think you should know about.

If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.

NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.